Senate bill raises the stakes in financial reform debate
The future of the derivatives market in the US has become the subject of a political tug-of-war, after the Senate Committee on Agriculture, Nutrition and Forestry passed a bill prohibiting federal support to all dealers, derivatives exchanges, clearers and any large derivatives user.
If the bill – passed in a 13–8 vote on April 21 – becomes law, banks would have to carve out their derivatives business or forgo access to Federal Reserve funding and federal deposit insurance.
Banks were dismayed by the move, which has already run into stiff opposition. In comments published on April 24, the Federal Reserve called for the relevant section of the bill to be deleted, saying it
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